Way back in the olden thymes, I was one of those weirdos who liked tinkering with early computers. Off and on throughout my life I have fiddled with computers, usually being a bleeding edge adopter. For instance, I built a PC running OS/2 when most people thought it strange and exotic to even own a computer. I was on-line when it meant knowing how to program a modem so you could dial into a BBS.
The point is that I’m OG when it comes to the interwebs and the communication revolution. I’ve seen it all. One part of that “all” is the fact that a big part of what has driven the business is theft. Using technology to get around artificial barriers, designed to preserve capital, is what fueled the internet in the early days. That meant spoofing the phone company to avoid paying phone line charges. The phone company called it theft. The hackers called it “disruption.”
Napster was driven by the desire to get around the artificial barriers created by the music business. The music company wanted you to buy the whole CD to listen to one song. Technology made it possible to unbundle the CD and distribute the song free to whoever wanted it. The record companies called it theft, hackers called it disruption. I’ll just note that the hackers won.
That’s the positive spin. The truth is a lot of what is passed off as innovation is just the clever use of technology to transfer costs to unsuspecting third parties. Uber is a cost shifting operation. Facebook and NetFlix are cost shifting operations. In other cases, it is just outright fraud, as in the case of advertizing.
There may be much more advertising in apps than it seems. Thousands of mobile applications are secretly running ads that can’t be seen by users, defrauding marketers and slowing down smartphones, according to a new report by Forensiq, a firm that tracks fraud in online advertising.
Over the course of the 10-day study, one percent of all devices observed in the U.S. ran at least one app committing this kind of fraud; in Europe and Asia, two to three percent of devices encountered fake ads. Forensiq identified over 5,000 apps that display unseen ads on both Apple and Android devices. Advertisers are paying about $850 million for these ads each year, according to the report, and the apps with the highest rate of ad fraud can burn through 2 gigabytes of data per day on a single device.
The sheer amount of activity generated by apps with fake ads was what initially exposed the scam. Forensiq noticed that some apps were calling up ads at such a high frequency that the intended audience couldn’t possibly be actual humans. The apps, says Forensiq, were hitting these numbers by showing as many as five ads in the background for every ad visible to users. Some apps continued to scroll through ads even after the app had been closed.
This is simple fraud, of course, but the sort that is hard to detect. The app maker can make claims against the advertiser that cannot be disputed easily. Facebook has been accused of doing something similar, by using click farms. Since we no longer enforce the laws on rich people and their corporate faces, these crimes go on at a wholesale level.
The worst part of it is the phone user is having his minutes consumed by ads he does not want. This happens right out in the open, but people don’t notice it. Open a YouTube video on your phone and you pay to watch ads at the front end through your monthly minute allocation. The kind of fraud in this story means your minutes are being used while your phone is idle.
This is only going to get worse. Theft of medical records, bank records and security records is already a problem. The source of this problem is the general failure of the people in charge to take responsibility for running society. There’s no longer any sense of obligation on the part of elites. They look ta the Ground People with contempt and say things like “they should be more careful.”
In the case of these apps, the people in charge should round up the app makers and put them in a place like Angola state prison. These are small dollar crimes, but they erode social trust. It’s why counterfeiting carries such harsh penalties. But, the people in charge no longer care about social trust. They don’t think it matters. They’re probably right.
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It’s an interesting duality, with advertising taking on the role of Schrodinger’s cat, in that they say that it does and does not work. (It works in selling product, but it doesn’t work in influencing someone to do something negative.)
Advertising is smoke, and that’s the way they like it.
Uber is a cost shifting operation. Facebook and NetFlix are cost shifting operations.
I wondered about how the above cost shift. NetFlix uses tons of bandwidth, thus shifting the cost onto everyone else who pays for access to the internet. Later, you wrote that Facebook has been accused of “using click farms”–which I guess means they’re generating phony clicks on advertisements, thus shifting costs to their advertisers. Is that right? (I despise Facebook. I strongly suspect they constantly change their security procedures so users cannot keep up, allowing FB to harvest personal information into huge lists that they sell.) Also, I’d bet FB, like NetFlix, does not pay for its share of bandwidth.
What about Uber? How do they cost shift?
your car, your insurance, you are an independent contractor (for now).
this shifts cost from taxi company to you as a driver
Z- help me understand- and I’m not trying to be a wise guy here- why would an app run ads I can’t see?
Most “free apps” rely on ads. They charge the advertiser based on “impressions” which loosely means the number of times the ad is viewed. They will track the click throughs which is supposed to mean the number of times a user clicks on the ad. Obviously, an app with loads of intrusive ads is not getting used so they fake the ads and fake the clicks. This makes it appear that you are watching these ads and clicking on the content.
The carriers have an incentive to look the other way as they charge you for minutes used. Heavy users will not notice that some percent of their minutes are being used for this scam. Instead they just buy the next level plan to avoid overage fees.
Thanks! That makes sense.
For one of the experts: Does use of an ad blocker stop revenue generation for the ad “seller” (however that’s determined)?